2003 Yellow Book
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Debt Service
(Summary)
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Adjusted
Appropriation
2002-03
Executive
Request
2003-04
Change Percent
Change

AGENCY SUMMARY

General Fund 245,000,000 245,000,000 0 0.0%
Emergency 1,272,000,000 2,260,000,000 988,000,000 77.7%
Debt Service Fund 4,000,675,000 3,677,300,000 (323,375,000) -8.1%
Capital Projects Fund - Other 625,000,000 700,000,000 75,000,000 12.0%
Fiduciary 40,000,000 40,000,000 0 0.0%
Internal Service Fund 110,000,000 60,000,000 (50,000,000) -45.5%

Total for AGENCY SUMMARY: 6,292,675,000 6,982,300,000 689,625,000 11.0%


Budget Highlights

The Executive recommends total Debt Service Budget appropriations of $6,982,300,000 for State Fiscal Year (SFY) 2003 04, a net increase of $689,625,000 over SFY 2002-03. This increase is primarily attributed to an increase in the All Funds Contingent appropriation of $988,000,000, which the Executive plans to use to satisfy the maximum debt service requirement on all outstanding short-term and variable rate debt.

The Executive submits a separate appropriation bill for debt service, which reflects the maximum required debt service payments for the State Fiscal Year. This appropriation reflects a maximum annual rate of 18 percent on the variable rate debt and other short term debt instruments issued by the Local Government Assistance Corporation (LGAC), the Housing Finance Agency, the Urban Development Corporation, the Dormitory Authority and the State's General Obligation bonds.

General Fund

The Executive recommends a total General Fund appropriation of $245,000,000 for debt service, the same level appropriated in SFY 2002-03. This total includes a $20,000,000 Contingent appropriation for the State's potential liability to rebate arbitrage earnings on its General Obligation bonds to the Federal government. It also includes a Contingent appropriation of $225,000,000 for redemption of General Obligation serial bonds should this become necessary to maintain their federal tax exemption. These contingent appropriations are the same as the enacted level in SFY 2002-03. It is not anticipated that disbursements will be necessary against these contingent appropriations.

Internal Service Funds

The Executive recommends total appropriations of $60,000,000 for the Centralized Services Funds, a decrease of $50,000,000 from SFY 2002-03 for payments on the State's Certificates of Participation (COPs). This appropriation includes debt service payments on planned COPs for equipment to implement the new Welfare Reform Computer Systems.

General Debt Service Fund

The Executive recommends total appropriations of $3,677,300,000 for the General Debt Service Fund, a net decrease of $323,375,000 from SFY 2002-03. Significant adjustments include:

  • $607,600,000 reduction in General Debt Service Fund;

  • $100,000,000 reduction in the Mental Health Services Fund. These savings are derived from a decrease in the maximum appropriation for OMH's short-term debt instruments, due to the refinancing of some mental health bonds;

  • $75,000,000 reduction in the State's General Obligation (GO) Bonds; and

  • $405,000,000 increase in Revenue Bond payments.

Included in the General Debt Service Fund is a $55,000,000 appropriation for the Debt Reduction Reserve Fund (DRRF). This appropriation is necessary to continue paying down existing debt and increasing the pay-as-you-go share of capital projects.

Capital Projects Fund

The Executive recommends an appropriation of $700,000,000 in the Capital Projects Fund, an increase of $75,000,000 over 2002-2003. This increase reflects the Executive's proposed capital program for transportation. This appropriation will be set aside in the Dedicated Highway and Bridge Trust Fund. Disbursements from the fund are used to make payments to the Thruway Authority for debt service on its Dedicated Highway and Bridge Trust Fund bonds.

Fiduciary Fund

The Executive recommends an appropriation of $40,000,000 in the School Capital Facilities Financing Reserve Fund, which is the same level as in SFY 2002-03. These funds are used to pay debt service on bonds issued by the Dormitory Authority on behalf of certain Special Act School Districts, pursuant to legislation enacted in 1988.

Debt Reform

The Executive proposes a Constitutional Debt Reform package following the enactment of the Debt Reform Act of 2000. This debt reform plan would do the following:

  • Constitutionally mandate the State-supported debt outstanding and debt service cap now imposed by the Debt Reform Act of 2000;

  • Eliminate all State-supported public authority debt;

  • Authorize a limited amount of revenue-backed debt;

  • Require that at least one-half of the debt be approved by the voters; and

  • Authorize multiple General Obligation (G.O) bond act proposals.


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